The Expected Net Cash Flows of Advantage Leasing for the Next

question 10

Multiple Choice

The expected net cash flows of Advantage Leasing for the next three years are $42,000,$49,000,and $64,000,respectively.After three years,the growth rate of these cash flows will be a constant 2 percent annually.The WACC is 8 percent.What is the present value of the terminal value?

• A)$881,822
• B)$863,689
• C)$959,259
• D)$910,444
• E)$828,406

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Definitions:

Reciprocal Determinism

The theory that a person's behavior is both influenced by and influences their personal factors and the environment.

Defence Mechanism

Subconscious methods employed to safeguard someone from the anxiety that stems from impermissible sentiments or thoughts.

Reaction Formation

A defense mechanism where an individual unconsciously replaces an anxiety-producing or unacceptable thought or feeling with its opposite.

Unrealistic Amounts

Quantities or levels that are not achievable or practical based on current conditions, capacities, or resources.